New Book Exposes Massive Fraud
February 1, 2006 9:08 PM   Subscribe

$200,000,000,000 scandal? America is ranked 16th in the world in Broadband speed. Wanna know why? Verizon won’t tell you, but Bruce Kushnick will. His latest book, $200 Billion Dollar Broadband Scandal, is a powerful critique that outlines a truly massive case of fraud. The Bell Companies (Verizon, SBC, Qwest, and BellSouth) used trickery and deceit to swindle the U.S. out of a promised 45mbps internet connection. They collected billions of dollars in regulatory fees, and now they are attempting to commoditize the Internet. Kushnick's book uses stunning detail to expose this treachery with accuracy and thoroughness.
posted by sswiller (78 comments total) 1 user marked this as a favorite
 
see also
posted by baklavabaklava at 9:11 PM on February 1, 2006 [1 favorite]


Amazing. I while ago I heard something on NPR about Japan's advanced internet utilities and how it's largely the result of a government subsidized project to deliver high speed & high quality network connections throughout the country. I guess as long as Americans are "satisfied" with lousy and expensive connections things won't change.

To think that the telcos may have actually been doing something illegal... well, it ain't exactly surprising is it? These are the same companies who used to switch our long distance service without telling us.
posted by wfrgms at 9:16 PM on February 1, 2006


I'd never heard about any sort of "scandal", but I always found it strange that countries like Japan and South Korea can manage 10mbps for the same price we pay for a 20th of that speed.
posted by borkingchikapa at 9:17 PM on February 1, 2006


On reading, the article says 100mbps is standard in SK and Japan - is that really true?
posted by borkingchikapa at 9:20 PM on February 1, 2006


Capital M for mega- please. Otherwise it's millibits, and no-one likes millibits.
posted by Protocols of the Elders of Awesome at 9:29 PM on February 1, 2006


Peeg, I had no idea you were such a nerd. Well, almost no idea.
posted by jonson at 9:30 PM on February 1, 2006


When does the shooting start?
posted by namespan at 9:31 PM on February 1, 2006


Full moon.
posted by Protocols of the Elders of Awesome at 9:32 PM on February 1, 2006


Megabits can suck it.
posted by borkingchikapa at 9:34 PM on February 1, 2006



I recenty l waged my tiny little protest by turning off DSL and
switching to a Cable Modem. Its not much but I don't want
to give any more money to the phone company.
posted by thedailygrowl at 9:37 PM on February 1, 2006


Good post; thank you. I remember hearing all of the FTTC / FTTH nonsense 10 years ago. Imagine having a (roughly) OC-1 connection to every household. Now that's teh fast internets!
posted by AllesKlar at 9:38 PM on February 1, 2006


I have long wanted to pool resources with my neighbors to string a 100Mbps connection between our houses with a big fat pipe in and out of the internets -- I always get thwarted by (a) the cost of an internet connection sufficient to server all of our needs, and (b) finding the necessary equipment to bridge the connection between the houses without the houses burning down if lightning strikes.

So for the moment I have a 1.5mbps down/460kbps up connection with five static IPs ($60 a month) that I share with one neighbor via wireless...but it's just not the same, you know? I wouldn't want to escalate that up to three or four neighbors.

One can only hope that these companies that are so gung-ho about streaming television-quality content (movies and whatnot) via broadband can somehow outdo the bells in the manipulation department -- but I'm not holding my breath.
posted by davejay at 9:38 PM on February 1, 2006


I recenty l waged my tiny little protest by turning off DSL and
switching to a Cable Modem. Its not much but I don't want
to give any more money to the phone company.


Unfortunately, cable companies suck, too. I used to work for TCI; believe me, I know how they screw customers.
posted by davejay at 9:39 PM on February 1, 2006


they == cable companies in general
posted by davejay at 9:39 PM on February 1, 2006


I live in Tokyo and I have a blazing fast internet connection, via DSL (cable internet isn't as popular as it is in the states). I just tested it at 2552 kbps.

Funny thing is, personal computers aren't nearly as popular here as in the states. Space for a computer is at a premium, so folks usually just email each other via cellphone.
posted by zardoz at 9:39 PM on February 1, 2006


You can get ADSL in flavors such as 1M-47M for around $30 USD per month here in Japan. The difference in price between each rank is extremely small. You can get fiber-optic connections to most apartment complexes in Tokyo for around $20/month. New buildings are almost guaranteed to have it available, and for older buildings it's just a matter of convincing the landlord and enough other residents to go for it.
posted by nightchrome at 9:41 PM on February 1, 2006


zardoz, woot Tokyo mefites represent!
posted by nightchrome at 9:44 PM on February 1, 2006


davejay: (b) finding the necessary equipment to bridge the connection between the houses without the houses burning down if lightning strikes.

Have a reference on this? I think it is just more FUD, not much of that in IT. Check here for more details on my speculations: WiFi with my neighbour.
posted by Chuckles at 9:44 PM on February 1, 2006


Damn it, I hate it when I get played for a sucker.

Let's see.
Healthcare blows chunks.
President's autistic.
War (and a rubber stamp) have created massive, massive debt for my kids and their kids and your kids.
Fundamentalist religious zealotry is running rampant.
My governor is the Terminator.
And now I find out that my damned internet (1.2 Mbits/sec) is laughed at by most of the rest of the modern world.

If only France weren't so full of, you know, French people.

And Davejay, you should watch the episode of Mythbusters where they direct manmade pseudo-lightning into a house again and again and have to work to make it catch fire.
posted by fenriq at 9:51 PM on February 1, 2006


Hang these fucks.
posted by scarabic at 9:52 PM on February 1, 2006


Same thing is true of your health care, your prisons, your army. It's the privatization swindle. Give a government-owned entity $100 of taxed/billed money and it will do $60 worth of actual work and distribute $40 to a raft of unnecessary public servants. Give a privatized entity the same $100 and it will do $20 worth of actual work and give $20 to its upper management and $20 to a raft of unnecessary private enterprise employees and contractors and $20 to stock-holders (essentially a random chunk of middle and upper-class citizens) and $20 will go missing.
posted by aeschenkarnos at 9:59 PM on February 1, 2006


Otherwise it's millibits, and no-one likes millibits.

Nonsense. I had a fabulous lunch there about a week ago. Ah, Millibits, the Restaurant at the End of the Internet.
posted by ROU_Xenophobe at 10:03 PM on February 1, 2006


VERIZON IS AN EVIL, VILE COMPANY.

Did you hear me? They are the epitome of everything that is bad about big business. Corporations are teh suck.

/0.02 cents
posted by codeofconduct at 10:05 PM on February 1, 2006


In Tokyo, I just tested my DSL: 3486.3 Kbps. I'm sure it's supposed to be faster (47M?) but I don't really need it much faster than this.
posted by dydecker at 10:08 PM on February 1, 2006


My neighborhood recently was wired for Verizon FIOS (fiber optic). I have not ordered it yet because the Verizon reps say you cant run servers I assume they are blocking ports. In any case Verizon will soon be offering TV over IP to compete with Comcast - given the huge potential of TV subscriptions (more than $200 billion long-term) I dont see why Verizon would intentionally not install fiber optics and thus sabatoge its ability to create new revenue sources.
posted by stbalbach at 10:10 PM on February 1, 2006


Jebus, 100Mbps. I can barely even imagine the concept. I wouldn't have to pay for internet access AND webhosting. I could control my own damn servers. Have my own VOIP PBX. No stupid restrictions about how much space I can take up, or software i want to install...

This, though is another interesting article on the subject. Apparently, 99% of the available bandwidth of the new Verizon FIOS is reserved for cable TV.
posted by Freen at 10:14 PM on February 1, 2006


Heh... ROU, it was a stretch, but it was funny!
posted by BobFrapples at 10:19 PM on February 1, 2006


Interesting to think just 22 years ago I thought my 300 baud modem was hot stuff. Now thousands of times that still isn't fast enough.
posted by chef_boyardee at 10:25 PM on February 1, 2006


Representing from rural Australia, where the phone lines are so bad my 56k modem won't connect faster than 28.8kbps, and ADSL is but a distant rumour...and when it arrives, we'll be able to get it for $25 a month with a 200mb (yes, read that again, 200 megabyte) download limit with excess usage charged at 19c a megabyte, or pay $39 a month for 5gb download limit with data-shaping down to modem speeds once you exceed it.
posted by Jimbob at 10:54 PM on February 1, 2006


I'm sad that Comcast doesn't service the area I've just moved to. Adelphia install arrives this Saturday, and I'm certain it'll be abyssmal. The places I leech my tv & music from have a bottom-end cap of 100Kbps, so I sincerely hope that Adelphia can deliver the 300-500Kbps that I got used to through Comcast.

The 88Kbps cap through Verizon dsl at my current location sucks :(

45Mbps sounds insanely cool, and I'm jealous of my .eu friends whos ISP's smoke any .us home connections I've seen.
posted by starscream at 11:16 PM on February 1, 2006


Representing from Russia, I'm paying 103$ a month for a 64kbit (variable speed, worse on weeknights) connection, and there's a 1gb download limit. Costs for downloading over 1gb are about 8.7 cents a meg.

Internet sucks here. At least out in the Kaluga region.
posted by fake at 11:21 PM on February 1, 2006


I'm also in Tokyo. My my home and my office have 100Mb fiber connections to the Internet. I haven't performed an actual throughput test at either place but I routinely move big files around between places that I know have similar connections. The only times I notice any kind of latency is when I know the far-end connection is slow (< DS3) or the latency can be explained by some kind of processing overhead (like tar piped to gzip over and ssh tunnel).

Japan Internet rocks.
posted by mexican at 11:51 PM on February 1, 2006


I really feel sorry for those in really corrupt places like the above posters in Russia and Australia -- apparently South Africa is also terrible -- Harsh speed limits, per absurd megabyte charges is you go over a paltry cap.

I myself have a cable modem on Comcast running at 8.8Mbits down / 768kbits up with up to 10 public IPs. I can get 1 Megabyte per second down on a single HTTP download. I don't pay for my cable connection though. I use a specially 'configured' modem to do this, and it can work on cable providers other than Comcast.

If you're networking savvy and want to duplicate my efforts, my email is in my profile.
posted by blasdelf at 11:53 PM on February 1, 2006


That Australian situation sucks, I feel for you. A bandwidth limit is worse than limited speeds.

I think I've banged this drum before, but anyway, I'll do it again.

It was only with some kind of State intervention that I enjoy an internet service that provides me with: 13 Mbps Down and 1 Mbps Upload, free Voice over IP to all the international locations I call and a basic TV over IP package. All for €30.

The most recent brilliant thing they've done is to allow one to pipe the TV signal to one's desktop/laptop using VLC player. Some people have developed applications to record the streams, too.
posted by gsb at 11:53 PM on February 1, 2006


Ten minutes ago, I was very happy with my cable modem. Now I am angry, disgruntled, indignant, and peeved. Thanks guys.
posted by LarryC at 12:01 AM on February 2, 2006


The first article sings the praises of French broadband, and while it is fast, it generally isn't cheap (unless you're in Paris, where there are more options) and there are plenty of caps, typically 500Mb/month. It's also a public-cum-private monopoly in many/most places (France Télécom).
posted by baklavabaklava at 12:08 AM on February 2, 2006


Yawn. Retrofitting an entire country, especially one as large as the US, with that much fiber would *not* be easy, or quick, or cheap. I call straw man.
posted by public at 12:49 AM on February 2, 2006


Sigh. Think about it - in Japan, the population density is significantly higher than in North America. Ergo you can wire a whole apartment complex to fibre optic just by going straight up. It's more a case of infrastructure and logistics than it is evil money-grubbing so and sos.
posted by RokkitNite at 1:15 AM on February 2, 2006


On reading, the article says 100mbps is standard in SK and Japan - is that really true?

Not quite standard yet here in Korea, but pretty much everywhere you want, if you want it. It'll run you less than the equivalent of $50 a month, all you can eat.

I pay under $20 a month for a solid 8Mb/2Mb up/down link, no caps.

WiBro's coming onstream now, and it's gonna be pretty cool. Who's going to say no to 30 to 50 Mb/s wireless?
posted by stavrosthewonderchicken at 1:18 AM on February 2, 2006


Does anyone else smell something fishy here? From the slimy presentation of the first link (typos abound) to the same link, repeated, to the self-link (Steve, meet Steve). Then the rest of the links all echo the same elements without bringing anything new to the table (i.e., strictly about the book), not to mention they're all from public discussion boards.

I'm sure there's corruption abound and we're all knee-jerky to feel taken advantage of, but there's something much too specious going on here.
posted by Mach3avelli at 1:23 AM on February 2, 2006


Hmm, I may be wrong about the self-link, but I wouldn't be so suspicious if there wasn't something so .....slimy about it all. The more in-depth I'm delving, the worse this FPP gets.
posted by Mach3avelli at 1:40 AM on February 2, 2006


"In Tokyo, I just tested my DSL: 3486.3 Kbps. I'm sure it's supposed to be faster (47M?) but I don't really need it much faster than this."

[weeping bitterly from one of the supposedly "most-wired" cities in the country, almost within view of the Amazon corporate headquarters, where our DSL was barely usable and had outages of 5 minutes to two hours several times a day]
posted by litlnemo at 1:43 AM on February 2, 2006


On reading, the article says 100mbps is standard in SK and Japan - is that really true?

I live in Sweden, and apparently a 100 mbps connection is cheap enough here (at least in the bigger cities) that everyone in my apartment building is getting one for free, without a rent increase. Yay!
posted by martinrebas at 1:47 AM on February 2, 2006


Yep, tokyo is great! I'm paying for the cheap ~$30 / 10mbps (totally uncapped by default) option here in Tokyo, which seemed like a dream when I first got here from Australia a few years ago. I have no idea what Aus is like now, but back when I left, ADSL was limited to 256k in my area, and capped at a few hundred meg per month.
posted by Meridian at 2:47 AM on February 2, 2006


What's the contention on the high speed (10mbps+) connections? I've heard they are pretty high. I can get 4 Mb/s in the UK for a pretty reasonable price with a contention of 20.
posted by public at 3:16 AM on February 2, 2006


Contention?
posted by stavrosthewonderchicken at 3:36 AM on February 2, 2006


I was one of the first subscribers on Seattle's first cable internet node. After my new provider (3RD? 4TH? BUYOUT) recently tried to pull an AOL, changing service agreements to the new walled garden and tiered service, I decided to take my business elsewhere. A fat cable pipe's speed, especially if my city already paid for the infrastructure and still gets charged, is not worth giving up my privacy by accepting mandatory spyware/adware that tracks the use of the internet we pay for. If they advertise themselves as an internet provider then they need to provide access to the whole internet. Any less access, restricting certain ports, domains, or other infrastructure elements of the internet must be advertised as less than the whole. Trying to extort extra fees for home networks, even properly configured preexisting ones, is predatory if not illegal. Where are our legislators to represent us?
posted by roboto at 4:13 AM on February 2, 2006


Um, jimbob is moaning about rural Aust deals, which indeed suck teabags. I am in town on 24 meg/sec, $35 Aus/mth for 5 gigs, which I think is not unreasonable.
posted by Wolof at 4:28 AM on February 2, 2006


I just simply wanted to say that one of my old Telecomm. professors used to call AT&T and the Baby Bells (commonly referred to as RBOCs) the "Robber Barons of Corruption". That is all. Thank you.
posted by mrzer0 at 4:32 AM on February 2, 2006


Population density is no excuse. We didn't let that stop rural electrification now, did we?
posted by PsychoKick at 4:53 AM on February 2, 2006


I'd love to see some economic/technology models putting connection speed against the diffusion of the Internet as a new technology.

The Internet boom and subsequent bust was in may cases a result of too many ideas coming too early due to limitations in the technology -- the opportunity and the promise appeared immediately, but the technology quickly shifted from enabler to impediment when people pushed the edge. What would the Internet look like today if the pipe was big enough at the peak of the boom to support more demanding innovations? (Would we even have blogging?)

If this truly was a case of take the money and run by the Bells, they have far more to answer for than stealing taxpayer money.
posted by VulcanMike at 5:22 AM on February 2, 2006


Tokyo MeFi meetup @ MetaTalk.
posted by gen at 5:42 AM on February 2, 2006


My 2.3 mbps DSL connection (which is pretty reasonable from SBC) is server constrained 95% of the time. The only thing that uses it is unusually well seeded torrents. A faster connection wouldn't help at all the rest of the time.
posted by smackfu at 6:11 AM on February 2, 2006


Verizon may suck, but they're giving me a 30Mbit FIOS connection, and I am loathe to bite the hand that feeds me porn.
posted by pmbuko at 6:12 AM on February 2, 2006


Retrofitting an entire country, especially one as large as the US, with that much fiber would *not* be easy, or quick, or cheap.

We seem to have been able to manage most urban areas in Canada. High speed DSL is creeping into rural areas too. There are very active efforts to get high speed (satellite) networks into the high Arctic. It's seen as a national priority by government to equalize education and health care. Remote surgeries look extremely promising, for example.

We're hardly perfect: Bell is just about the most evil company in Canada, and Rogers (the major cable provider) one of the most incompetent (they can't combine home cable and home phone service, provided over cable, on the same bill, for example).

It's a matter of making it a government priority. Not just subsidies and government initiatives (though that's what works in the North and for health care), but deregulation and opening of monopolies. Our CRTC moves at glacial speed most of the time, but they were clever enough to open the DSL market to anyone who wanted to play. Competitive pressure has been instrumental in keeping costs down in Canada. If Bell or Rogers get too far out of hand, IGS or Sprint or some other small company will cut them off at the knees.
posted by bonehead at 6:27 AM on February 2, 2006


It all sounds so discouraging -- I think I'll just cancel my broadband connection and do all my internetting here at work like everyone else in my office.
posted by JanetLand at 6:35 AM on February 2, 2006


HERE GET NET BY TELEGRAPH STOP EVERYONE DONT TYPE SO GODDAMN MUCH STOP
posted by hangashore at 7:05 AM on February 2, 2006


ever wonder why you always loose Internet games to them Japanese kids? well now you know your lag is killing you.
posted by stilgar at 7:06 AM on February 2, 2006


bonehead writes "We're hardly perfect: Bell is just about the most evil company in Canada, and Rogers (the major cable provider) one of the most incompetent (they can't combine home cable and home phone service, provided over cable, on the same bill, for example)."

You may want to note, as well, that our ISPs are using traffic shaping software to clamp down on uses of the internet that they disapprove of... like competing VOIP services, for example.
posted by ChrisR at 7:08 AM on February 2, 2006


It's the Koreans that'll kick your ass, stilgar. The Japanese aren't wild about online computer games AFAIK.
posted by selfnoise at 7:10 AM on February 2, 2006


I live in the UK. We don't have The Bell Companies here. So i demand to know: where's my 45mbps internet connection!?
posted by tnai at 7:19 AM on February 2, 2006


I see this more as a function of the density of Japan, Korea and France. This is similar to the car/public transportation debate: we have much more space than other countries, and we are much less dense. You can criticize that as greedy or lazy all you want, but I'm sure that anyone would take the extra space if they could have it.
More important--I'm not sure if the mechanism the first article provides is a sufficient justification for asserting fraud. Deregulation has meant that companies had to compete to provide service, and thus that charging extra money would lead to a loss of customers. What is the reason for discounting this flexibility?
posted by austin5000 at 7:34 AM on February 2, 2006


Wolof: $35 Aus/mth for 5 gigs,

5 gigs/day, sucks! $35 AUD isn't too expensive, but sounds like your service is about as terrible as Canadian service.

bonehead: We seem to have been able to manage most urban areas in Canada.

The providers in Canada are very nearly as abusive as the ones in the US. They aren't trying to pull quite as many political shenanigans, which is nice, but they don't really provide value commensurate with price. Poor download speed, atrocious upload speed, low bandwidth caps, are all common problems in Canada the same as in the US.

The CRTC isn't bad, but they have demonstrated an interest in preserving the business model almost as much as the crappy telcos/cable cos. In fact, they have artificially forced prices on VoIP higher to keep unfair competition out. While that might be a reasonable policy for the CRTC, it actually demonstrates a complete misunderstanding of what is possible with the technology.

We need a government initiative. We need to treat data communication like any other utility.
posted by Chuckles at 7:36 AM on February 2, 2006


I believe the point of the book is not that we deserve faster internet connections because we're special, but that we have already paid additional fees to the ILEC's over the last twenty years that were explicitly for building advanced telecom services that have never been delivered.
posted by dglynn at 7:38 AM on February 2, 2006


I'm here in the South-Eastern U.S. I can attest to the evil that is Hell.... ahem, BellSouth. I pay Speakeasy $84 a month for 1.5/384... but in over 10,000ft from the C.O. so I get 1290/320 from the POP in Atlanta. I have two static IPs at the moment, and no restrictions in service. Jacksonville is a vile market for broadband service... but I know it's no where near as bad as more rural areas in NEFLA.

It's painful to look to think how Internet access is stymied in the nation that developed packet switched networks. Take a look at this map. It indicates which C.O.s can accommodate xDSL type connections. Take note of all the red... its' quite the digital divide.
posted by PROD_TPSL at 7:39 AM on February 2, 2006


Blame the FCC. Just another example of bought out government agencies screwing the public and serving corporate bottom lines.
posted by JJ86 at 7:56 AM on February 2, 2006


I'm with Mach3avelli. This is an interesting post, but there's something fishy about it. It's only sswiller's second front-page post, sswiller (named Steve) links to an article by Steve, and the post links to the release page of the book twice.

I suppose sswiller might be Steve Stroh and found out about this book and just wants to publicize it, but this post still seems a little sketchy.
posted by driveler at 8:03 AM on February 2, 2006


tnai - UK cable companies are testing 100Mb lines for introduction within the next 2-3 years - currently cable runs to 10mb in servicable areas and there are some lucky Londoners who can access >24Mb ADSL2 depending on postcode.
posted by longbaugh at 8:06 AM on February 2, 2006


You got me. My real name is James Frey.

Actually, I know Kushnick personally. I'm not on the take. I just support what he's doing, and he needs all the help he can get.
posted by sswiller at 9:00 AM on February 2, 2006


In the future, in the UK, we will all have 100Mbps connections.

And 1GB per-month usage allowances.
posted by Blue Stone at 9:50 AM on February 2, 2006


Can there be a class-action suit about it? or because the companies always say "Up to whatever speed" not?
posted by amberglow at 10:10 AM on February 2, 2006


Blue Stone - without advertising who I work for nowadays, not every broadband company in the UK sets usage caps.

amberglow - the reason for the "up to" statement is the speed loss is a result of distance from the exchange. No ADSL carrier can guarantee a speed for your broadband.
posted by longbaugh at 10:21 AM on February 2, 2006


15 Mb, $50, no caps and no interruptions at all during the ~5 months we've had it. Verizon's fiber service is impressive. The evil empire has its moments.
posted by NortonDC at 10:52 AM on February 2, 2006


I'm pretty happy with my cable.
posted by Smedleyman at 11:06 AM on February 2, 2006


This is an outrage. But hear me out, together we can figh...[NO_CARRIER]
posted by hal9k at 11:07 AM on February 2, 2006


"I myself have a cable modem on Comcast running at 8.8Mbits down / 768kbits up with up to 10 public IPs"

Uh, how'd you get the IP addresses? Comcast here in the Bay Area won't give you static IP addresses (even if you pay) and will shut you down quick if they catch you running any servers.

That's what pisses me off - my internet connection is NOT just a goddamned 'entertainment medium.' I need to be able to do work stuff. Small business stuff. The stupid arbitrary limits that DSL and cable providers put on our services suck ass.
Although, I can get way better cable modem packages in North Dakota than I can get here in the Silicon Valley. One of the many reasons I'm moving. :|
posted by drstein at 11:26 AM on February 2, 2006


drstein - if you're running a business (even if you are simply self-employed) then they want you to take on their business services which are charged at far higher rates. Nothing pisses a corporation off more than the idea that they might not be charging you the absolute maximum possible for your usage.
posted by longbaugh at 11:48 AM on February 2, 2006


The name of the config file I'm using with my cable modem is "d10_m_sb5120_speedtier_c01.cm" from TFTP server 68.87.69.11.

I think this is their premium $55 per month (when you have cable tv) service

What really pisses me off is the way you can only ever get asymetrical connections, because the cable and dsl companies want to be able to use the upstream bandwidth for server hosting facilities. Bastards.
posted by blasdelf at 1:56 PM on February 2, 2006


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